Q4 2024 Saia Inc Earnings Call
Speaker Change: Dr. Sigurd Fjølsson Professor of English Students, Michael Treat Translations by Merrie Meadows
Speaker Change: Good morning and welcome to the SIA Incorporated fourth quarter 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Speaker Change: Good morning, and thank you for joining us to discuss <unk> fourth quarter and full year results I'd like to start by thanking all of our team members for all the hard work they've put in in 2024 wrapped up our 100th year crossing 3 billion in revenue a record for the company delivering nearly 9 million shipments are hungered earmarked as a rep.
Speaker Change: The year of investment for the company, we opened 21 terminals in 'twenty 'twenty, four which is by far a record and were real relocated an additional nine terminals. We ended the year with 214 terminals and now have a national footprint, enabling us to provide direct service to our customers and the 48 contiguous states the record level of it.
Speaker Change: Real estate and investments we made in 2024 officially position as a leading national carrier, allowing us to better service, our existing customers and grow with new customers. In addition to investments in real estate 'twenty 'twenty. Four is also a record year for equipment as we in service to over 6000 trailers. This.
Speaker Change: Investment in our fleet allows us to better service, our customers and provide unique solutions for their needs. In addition to record capital investments 'twenty 'twenty four represent a notable growth in our most important asset our people as we onboard over 1300, new team members. Each new met team member goes through a training program that is focused on our core.
Speaker Change: Values, starting with customer first a record level of investment in 2024 represents our commitment to putting the customer first and ensuring that we're instilling a great style culture in each of our new locations, while underlying macro or macro trends remain uncertain our year over year results continue to reflect the growth experienced since.
Speaker Change: Mid 2023.
Speaker Change: Our fourth quarter revenue of $789 million increase from last year's fourth quarter by 5% and is a record for any fourth quarter in our company's history shipments per workday increased four 5% and revenue per shipment excluding fuel surcharge increased one 3% wafer shipment increased three 7% in the quarter.
Speaker Change: <unk> well length of haul was up modestly yield or revenue per hundred weight, excluding fuel surcharge fuel surcharge decreased two 3% and it was impacted by the increased weight per shipment and reflects our continued mix optimization efforts compared to Q3 yield excluding fuel surcharge improved 1% as we can.
Speaker Change: We continue to seek markets and customers that value our differentiated service our fourth quarter operating ratio of 87, 1% deteriorated seasonally by 210 basis points compared to our operating ratio of 85 posted in the fourth quarter of last year.
Speaker Change: We remain intently focused on our pricing and mix optimization initiatives, we're encouraged to see weight per shipment trend in a positive direction sequentially. While we don't view this as an indicator that the macro backdrop or an industrial customers turning positive the increased weight per shipment reflects our continued efforts around mixed management through the G. R O.
Speaker Change: And contractual renewals as is typical we did see some volume shift and the weeks after the G. R. I was implemented in late October, but we remain focused on ensuring that we're compensated appropriately for the quality and service that we provide to customers. Similarly contractual renewals remained strong in the quarter, averaging seven 9%.
Speaker Change: We're very pleased with the progress of our new terminal openings throughout the year each of our 21, new openings presented us with the opportunity to grow with new and existing customers.
Speaker Change: Establishing the Si culture in each of these terminals has been critical and as we've discussed previously opening these new terminals required extensive recruiting onboarding and training, which are costs that are incurred ahead of opening all these new openings in total remain a drag on the company or we're starting to see the new terminals operate more efficiently and we're very pleased with our.
Speaker Change: Execution as discussed last quarter, the investments in our network or not for the current year.
Speaker Change: Or current quarter or year, but rather long term investments to help us continue to support our customers.
Speaker Change: I'll now turn the call over to Matt for more details from our fourth quarter and full year results. Thanks, Brett as Fritz mentioned fourth quarter revenue increased by $37 8 million to $789 million a record for any fourth quarter in the company's history yield excluding fuel surcharge declined by two 3% and yield decreased by five 4%.
Speaker Change: Including fuel surcharge.
Speaker Change: Our mix optimization efforts remain ongoing and we were pleased to see the increasing weight per shipment trends, which lead to increased revenue per shipment. Despite negatively impacting the reported yield metrics. As a reminder, there is an inverse relationship between weight per shipment and yield is heavier weighted shipments typically drives a lower yield.
Speaker Change: Fuel surcharge revenue decreased by 12, 5% and it was 14, 1% of total revenue compared to 17% a year ago revenue per shipment ex fuel surcharge increased one 3% to $299 17 compared to $2 $95.22 in the fourth quarter of 2023 and increased too.
2% sequentially from the third quarter of 2024, the sequential improvement represents the partial quarter impact of the <unk> as well as our ongoing pricing and mix efforts.
Speaker Change: <unk> increased 10, 1% attributable to a six 2% shipment increase and a three 7% increase in our average weight per shipment.
Speaker Change: Paul increased <unk>, 3% to 898 miles.
Speaker Change: Shifting to the expense side for a few key items to note in the quarter salaries wages and benefits increased eight 7%, which was primarily driven by a combination of our employee head count growth of approximately nine 3% year over year and the result of our July 2020 for wage increase which averaged approximately four 1%.
Speaker Change: The growth in headcount is related to the increase in volume compared to prior year as well as the opening of 21 new facilities in the past 12 months. In addition costs related to self insurance increased in the quarter.
Speaker Change: Purchase transportation expense, including both non asset truckload volume in LTE, all purchase transportation miles decreased by 11, 1% compared to the fourth quarter last year and was seven 4% of total revenue compared to eight 7% in the fourth quarter of 2023 truck.
Speaker Change: Truck and rail PT miles combined were 13, 1% of our total line haul miles in the quarter.
Speaker Change: Fuel expense decreased by two 9% in the quarter, while company line haul miles increased 11, 3%. The decrease in fuel expense was primarily the result of national average diesel prices decreasing by over 17% on a year over year basis claims.
Speaker Change: Claims and insurance expense increased by 16, 6% year over year the.
Speaker Change: The increase compared to the fourth quarter of 2023 was primarily due to increased claims activity during the quarter as well as unfavorable development of open cases.
Speaker Change: Depreciation expense of $54 1 million in the quarter was $18, 3% higher year over year, primarily due to ongoing investments in revenue equipment real estate and technology.
Speaker Change: Compared to the fourth quarter of 2023 cost per shipment increased 1.4% impacted by the wage increase and the costs associated with new terminal openings total expenses increased by seven 7% in the quarter and with the year over year revenue increase of 5% our operating ratio deteriorated to 87.1 compared to 85 a year.
Speaker Change: No.
Speaker Change: Our tax rate for the fourth quarter was 23% compared to 22, 8% in the fourth quarter last year and our diluted earnings per share were $2.84 compared to $3 33.
Speaker Change: In the fourth quarter a year ago.
Speaker Change: Moving on to the financial highlights of our full year 2024 results.
Speaker Change: Revenue was a record $3 $2 billion and operating income was $482 $2 million or operating ratio deteriorated by 100 basis points to an 85.
Speaker Change: Despite the impact from underlying inflation increased employee count and costs associated with new openings cost per shipment remained relatively flat increasing by 0.2% from 2023.
Speaker Change: I was very pleased I was pleased with the execution and operating efficiencies achieved by the team.
Speaker Change: The cost per shipment trends in 2024 show the impact of leveraging the fixed cost structure through expansion and we remain committed to investing in the business for the long term.
Speaker Change: We finished the year with just shy of $20 million of cash on hand, and about $94 million drawn on the revolving credit facility to bring us to approximately $200 million in total debt outstanding at the end of the year the.
Speaker Change: The reduction of cash is driven by capital expenditures in 2024, which were in excess of $1 billion.
Speaker Change: The record level of capital deployed in 2024 reflects our ongoing commitment to our long term strategy and our strong balance sheet supports these investments.
Speaker Change: In December we successfully completed the upsize and extension of our revolving credit facility and the increased capacity gives us flexibility with planned capital expenditures for 2025 and beyond our.
Speaker Change: Our diluted earnings per share for the full year were $13.51.
Speaker Change: Versus $13 20, $13 26 in 2023, I'll now turn the call back over to Fritz for some closing comments thanks, Matt as.
Speaker Change: As we completed our 100 year business I'm pleased with the execution of our growth strategy and our ability to demonstrate our customer first approach. During this record year of expansion, while the new terminals are a drag on margins in the near term. These investments in capacity are critical to creating long term value for both our customers and shareholders as we execute our long term strat.
Speaker Change: G. We constantly analyze the impact new no new openings from a margin and customer access acceptance standpoint, while the costs associated with new openings are more pronounced in some of the smaller terminals in less dense markets, having comparable footprint through our peers is critical.
Speaker Change: Value proposition for customers every new opening as an opportunity for us to discuss solutions with our current customer base as well as attract new customers, while the macroeconomic backdrop remains uncertain. The investments made in 2024 set us up to take advantage of the industrial recovery whenever they may come 2024 was a landmark year for.
Speaker Change: The company on many levels, we're able to implement a significant portion of our long term investment strategy and a comparatively short period of time. The next stage of development of our <unk> strategy will be focused entirely on supporting our customer success. Our national network provides a complete L. T. L solution for many of our customers and successful execution.
Speaker Change: Houston is defined by meeting and exceeding expectations, while at the same time, realizing an appropriate return on the significant investments as we've shown with the success of our organic expansion, which started with four facilities in may of 2017, we're creating value over time through an intense focus on keeping the customer for first we expect.
Speaker Change: To realize significant value not only the 21 openings from 2024, but also the other 48 openings dating back to 28 2017, we believe the high performing National Network provides the framework for further long term success, we're committed to the ongoing investments that support the customer experience as we continue to.
Speaker Change: Invest in our network and expand our footprint to better serve our customers, we anticipate capital expenditures for 2025 to be in.
Speaker Change: Excess of 700 billion, which should include additional relocations upgrades and openings of up to five to six facilities for a real estate investment pipeline as we have shown over our last 69 openings and 28 relocations, we've developed a repeatable competency in our organic expansion as a reminder.
Speaker Change: Or for those that may be new to the story new markets look relocations are opened with a long term focus in mind.
Incremental initial volumes come from customers familiar with Si and then further development of the local market, they're not about generating volume for this week or next quarter, rather they have been and will remain focused on creating long term value for our customers and returns for our shareholders. We remain focused on our performance for our customers and reinforcing our great culture.
Speaker Change: As we continue to execute our growth strategy.
Speaker Change: We're now ready to open the line for questions operator.
Speaker Change: We will now begin the question and answer session.
Speaker Change: To ask a question you May press Star then one on your telephone keypad.
Speaker Change: If you were using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: Our first question today is from Jon Chapell with Evercore ISI. Please go ahead.
Jon Chapell: Thank you and good morning.
Speaker Change: I'm just going to put a couple in one if that's okay. So first of all I think we can back into December tonnage and shipment, Matt, but if you want to just give that for clarity also what can get for January.
Speaker Change: Those two categories and then finally, if you can just remind us what the normal seasonal trend is for or pork you to walk here and how you see yourself setting up for that based on what you've seen in January plus some of the maturation of the terminals you have to last year.
Speaker Change: Sure John I'll give I'll start with the shipments and tonnage. So I'll do the full quarter just for to recap but October.
Speaker Change: Shipments per day up four 4% tonnage per day up six 9%.
Speaker Change: November shipments up two 3% tonnage up five 7%.
Speaker Change: December shipments up seven 2% tonnage up 13, 5%.
Speaker Change: January to date shipments up about six 5% tonnage up about 13, 5%.
Speaker Change: And in terms of the sequential I mean look if you go back in history. Some years are better some years are worse and I think if you were to dive into that it's probably really weather dependent if you look at all of those so.
Speaker Change: We don't love to talk about weather, but obviously January was pretty challenging from a weather standpoint that moved across so I think for us where we stand right now maybe we look at sort of a 30 to 50 basis points deterioration from Q4 range.
Speaker Change: January is behind us, but we still have February and March is really to make or break month for the quarter. So that's how we see it right now, but I think importantly.
Two things first if you look at the shipment growth that we just gave for January.
Speaker Change: Three quarters of that is from terminals that were opened in 2024, which is great. We're seeing a lot of customer acceptance in those but keep in mind. Those don't operate at company average and like Chris said those were a drag on margin. So good to see from a volume standpoint, but those aren't fully mature markets yet, but it also really I think where.
Speaker Change: Anchoring on the full year when we look at the full year, where we're still thinking in that 80 to 80 to 100 basis point range of improvement and we say in here on February 3rd and feel like that's well within our range. So Q1 <unk>.
Speaker Change: So it gives us some better weather here in the next couple of months, but we're really anchored on the full year as we look at it.
Speaker Change: Right Super helpful. Thanks, Matt.
Speaker Change: Sure.
Tom Water-witch: The next question is from Tom Water-witch with UBS. Please go ahead.
Speaker Change: Yeah I just.
Speaker Change: Wanted to see if you could talk a little bit about more about that or I think if we look back of your comments in the fourth quarter call last year, you said normal seasonality is like 50 to 75 basis points of improvement <unk> versus <unk>.
Speaker Change: And then I guess I'm, so you're pointing to you think nor are you.
Speaker Change: Youre doing worse than that like the I guess, the seasonality you'd say is a little different or you're factoring weather I just want to understand a little bit more about you know kind of that commentary out in <unk> and then I guess as you lap some of the terminal.
Speaker Change: Think about going into two key U.
Speaker Change: Do you start doing better than normal seasonality or just thinking about the kind of you know what's in the <unk> and how do we think about.
Speaker Change: You know the look forward on that and it kind of the timing of when that May change. Thanks.
Speaker Change: Yeah. Thanks, Todd So we opened 21 facilities.
Speaker Change: Starting in the second quarter of last year through the end of the year. So comparability of the past really there isn't a whole lot. There certainly theres some trends to consider yeah were when we gave you the thoughts around Q4 to Q1 were contemplating you know what we just saw it lived through in January where you've got the.
Speaker Change: Gross as Matt pointed out three quarters of it is coming from our terminals that have been open less than a year. So those the operating ratio for those facilities or is improving but it's certainly not at the company average so that that's a bit of a headwind, but we're thinking about this as sort of not only a 2025 investment but a more.
Speaker Change: Tie your investments so that makes sense and I you know I think as we consider that and look at history at different times in the history, we've had different weather events that we've dealt with in the first quarter, that's usually a pretty complicated quarter and as we know.
Speaker Change: The Q1 has made are made usually in March and so trending at off of what we see right now is pretty tough and what we see most importantly is the longer term view of this.
Speaker Change: Really we think it's pretty attractive.
Speaker Change: Yes.
Speaker Change: Well just one last add event.
Speaker Change: I think we've got another thing to factor I mean, we're getting.
Speaker Change: Equipment in it.
Speaker Change: More elevated pace than what we would typically the Oems are more on time, which is good from a supply chain standpoint. So depreciation is also a little bit more of a step up from Q4 to Q1 than what we would typically see in history as well so that's playing into it as well.
Speaker Change: So is it appropriate to think as you hit the easier comps in your lap against the terminals and I understand you're making that you know.
Speaker Change: Why is long term investments right now that has an effect as you as you build.
Speaker Change: But do you think it's reasonable to look at the comps and say Okay. You know when you get to the second quarter, then you start to see improvement or.
Speaker Change: Is that something where you say, okay, we need a little bit of help on the freight market in order to see the year over year improvement.
Speaker Change: Tom I, where we're looking to see improvement on that as we go through the year you know as these facilities.
Speaker Change: Reach higher levels of maturity that certainly is going to be an AD and we will be lapping periods in which we had startup cost and so I would expect through the year that we would see a continued improvement to get to that full year sort of 80 to 100 basis points of or improvement I mean, if we back up a little bit in the first quarter that.
Speaker Change: The implication is to get to that full year number we're going to see improvements in the other quarters.
Speaker Change: Right. Okay. Thanks for the time.
Speaker Change: Yeah.
Chris Wetherbee: The next question is from Chris Wetherbee with Wells Fargo. Please go ahead.
Chris Wetherbee: Yeah, Hey, Thanks, guys, Yeah, I guess, maybe just for the full year, So 80 to 100 basis points of or I guess yeah.
Chris Wetherbee: You've talked in the past about maybe 100 250, so just trying to get a sense of kind of roughly how you think about some of the moving pieces.
Chris Wetherbee: And then I guess, maybe just a follow up question on sort of what you're seeing from a volume standpoint, because obviously, we're getting good shipments, but significantly better than that tonnage gross of weight per shipments kind of moving up so kind of curious about those two factors kind of the full year from an <unk> perspective, the puts and takes relative to maybe what you had thought about in the past and then what youre seeing from a weight per shipment perspective.
Chris Wetherbee: So a good question I mean, we're we're intensely focused on continuing to find customers and end markets that really appreciate value size service. So you're seeing us kind of do on the playbook right. Now is continue to focus on developing those sort of customers that sort of freight profile that we think is.
Chris Wetherbee: Positive for Satya, and then competing and providing very high levels of service, which we feel like is differentiated and that's giving us an opportunity to grow maybe a little bit better than the competition. So we're seeing that we're seeing the value of our network.
Chris Wetherbee: Network investments coming into play now, which is important I gotta be honest with you we're not assuming any step up in the macro environment. We're competing in the environment that we're in right. Now so you know if the macro environment improves.
Chris Wetherbee: We see domestic manufacturing maybe step up.
Chris Wetherbee: I think that that's a tailwind for Sai, but I think right now what we're consuming that we're assuming that we're going to operate in the environment that we're in we're going to compete intensely on service and we're going to make sure we get paid for the for what we provide customers.
Chris Wetherbee: And just thoughts on the operating ratio for the full year relative to maybe how you thought about that in the past.
Chris Wetherbee: I think where you know the 80 to 100 right. Now is look we gotta be reasonable Brown you know we've got 21 facilities that we've added that we are going to continue to push the maturity.
Chris Wetherbee: You know and that's the assumption, we're making is if the environment stays as it is now I think if it if the environment were to step up or improve I think could we beat that and get into more of that traditional range that we've talked about.
Chris Wetherbee: Sort of that 100 to 150, yeah is that possible absolutely is higher than that possible. It sure is a but I think we're we're just focused on playing the hand, we've been dealt right now and that that's kind of where we get to the numbers that we have.
Chris Wetherbee: Got it thank you very much appreciate it.
Speaker Change: The next question is from Brian Olsen back with J P. Morgan. Please go ahead.
Brian Olsen: Hey, good morning, Thanks for taking my questions.
Speaker Change: Excuse me so I just wanted to see if you could comment a little bit more on the pricing trends how they progressed through the quarter. Obviously as mentioned mix is impacting the yield per hundred weight per shipment moving up. So maybe you can talk a little bit more about that and then the acceptance of the seven 9% year right.
Brian Olsen: Sure.
Brian Olsen: I think from our standpoint, I'll start with just general pricing trends you see it in our <unk> percent and our contractual renewals, where our focus is and that's the same as it has been and always is our focus we're intently focused on that especially from that mixed front and we talked a lot about that last year about handling.
Brian Olsen: Great for customers that we hadn't seen before and that we needed some time to work through that so we're encouraged to see the weight per shipment trending upward, but we've got to remain committed to that and keep our foot on the pedal on ensuring we get get compensated fairly for that so that impacts the yield but as you know Brian we focus everything internally on revenue per shipment are cost cutting.
To us and per shipment basis, So that's where our focus is and all else equal we prefer those heavier weighted shipments because generally you get you get paid more for them. So our focus is the same.
Brian Olsen: We were pleased to see that where we're seeing some good mixed trends from customers and we track that very very.
Brian Olsen: And we'll go have conversations in advance of the contract if we need to in terms of G. R. I acceptance.
Brian Olsen: There are volume always moves around a little bit and may have moved around a little bit more just based on the magnitude of what we took in the timing of when we took it just the slower periods of the year, but where we're making sure that we get paid for what we do and if it moves away for a short period of time, that's something we managed to do on our side, but acceptance.
Brian Olsen: It's been good it's always a little bit of movement at the beginning so it gets settled out in the months that followed typically.
Thanks, Matt a quick follow up can you just talk about the other expense line item that was up a good amount and I think we've really seen that in the past and I'm assuming your insurance just at the end of the year is that the normal stuff, but asthma.
Brian Olsen: Some color on that would be appreciate it. Thank you I assume youre referencing that other operating line that's yes that's.
Brian Olsen: Equipment and real estate disposals is all that is.
Brian Olsen: Okay. Thank you.
Speaker Change: The next question is from Jordan Alger with Goldman Sachs. Please go ahead.
Jordan Alger: Yeah, Hi, I was just wondering can you talk a little bit more about the mix optimization.
Speaker Change: How is it like a specific program is it you just.
Jordan Alger: Try to get more color on that and do we get to a point.
Jordan Alger: A normalization at some point where weight per shipment and yields both can go up I mean, I think historically that's been the case, but I don't know if theres a balance point.
Jordan Alger: And but in the meantime would one expect.
Jordan Alger: Yield ex fuel to stay down year over year. Thanks.
Jordan Alger: Well I don't I'd have to go back and look I don't know that we've seen a time, where our weight per shipment.
Jordan Alger: Is that different in Q4 of the prior year versus Q4, I mean, it was it was up pretty significantly. So part of that is what we were handling in that back part of 2023. After after a competitive for them out of business, but.
Jordan Alger: In terms of our mix optimization efforts every time, we're speaking with a customer we're looking at the freight profile and trying to identify what would work best for us in going after that.
Jordan Alger: One of the key points about this national network is that we have a better opportunity now than we ever have to have conversations with customers about handling everything for them and doing a great job for them in markets.
Jordan Alger: Places that we may not have had access to because we didn't handle that direct in the past. So in certain instances. That's a mixed discussion because we may not have had access to a customer's book of business that we're going to great Plains. As an example, so it's mix around that but it's also identifying the various commodities they ship and ensuring that that we're doing.
Jordan Alger: Great job for them and charging appropriately for them. So the weight per shipment divergence is really where that yield number is coming from but.
Jordan Alger: You know we were focused on pricing and when we look at it internally that's on a revenue per shipment basis is that we are tracking.
Jordan Alger: Okay. Thank you.
The next question is from Scott Group with Wolfe Research. Please go ahead.
Speaker Change: Hey, Thanks morning, guys. So.
Speaker Change: Any way you can give some directional color on how to think about maybe sequentially the yield and revenue per shipment. We've seen sequential increases the last two quarters would you expect that to continue again in Q1 and or maybe more.
Speaker Change: Maybe differently like within that or guidance sort of what's like the range.
Speaker Change: Revenue assumption, you've got within there maybe that would be helpful as well.
Speaker Change: Well, we don't we don't give intra quarter yield their revenue per shipment updates, but from our standpoint.
Speaker Change: We're continuing to focus on the exact same thing we're focused on pricing and having conversations with customers you've seen where our contractual renewals numbers have trended, but right now with the environment loosen everyone has capacity there are certainly instances where customers have options and they decided to try a lower priced option for.
Speaker Change: A period of time.
Speaker Change: And we're willing to let that go and when it comes back we're going to be ready at our rate. So.
Speaker Change: We're focused on on price and these conversations with customers not only on price, but about our expanded footprint and a national footprint that we can do more and more for them and that's a discussion that we have the benefit of having at a better rate than we ever have so from a pricing standpoint, our expectation is that the industrial customer is not.
Speaker Change: Turned yet, but our mix efforts seem to be paying dividends, but it's only been a couple of quarters, we've got to keep our foot on the gas here.
Speaker Change: And then just secondly, how many terminals.
Speaker Change: Terminals are you planning to open this year and just because it's topical in any way to sort of frame how much if any cross border, Canada, Mexico exposure I don't think it's much at all but just any color there.
Speaker Change: Yeah, No problem Scott So we'll open.
Speaker Change: Up to five or six facilities kind of scattered through the back half of the year.
Speaker Change: Really and that can have a meaningful impact on the business plus or minus they're all great investments, but when you get to 214 or so facilities five or six doesn't have.
Speaker Change: Have that meaningful of an impact and certainly the ones that will add will be more of the AR call. It in market or markets that are just moving closer to the customer. So I think potential drag would be pretty low.
Speaker Change: When you think about cross border for US you know the actual business that that handoff.
Speaker Change: Two ish percent of the total you.
Speaker Change: You know if you think about maybe manufacturers that have got sort of.
Speaker Change: On their side of the fence or their manufacturing as you know cross border I, you know I don't really have a break out there but in terms of what we deal with directly it's two ish percent in total for the whole company.
Speaker Change: Both north and South So Mexico and.
Canada.
Speaker Change: 2% <unk>, 2% total for the total.
Speaker Change: Two ish percent.
Speaker Change: Thank you guys.
Speaker Change: The next question is from Daniel Ambarella with Stephens. Please go ahead.
Speaker Change: Yeah, Hey, good morning, guys. Thanks, taking the questions.
Speaker Change: Last quarter, we talked about some surface opportunities in parts of your network, where you've grown quickly that showed up in the Matthew survey I guess, how have your initiatives trying to here to end the year, that's supporting kind of underlying pricing are you seeing service has been in the right direction and kind of any progress here to start going quite fast.
And we're real excited about what we're seeing it's shown up in our volume numbers. So that's positive as new facilities are probably est.
Speaker Change: Estimated probably three quarters of the of the increase year over year or related those facilities and I think customers typically vote with their feet. So that's a good good thing I'm pleased to see where that is and you know the.
Speaker Change: Incentive plan structures that we have in place are all focused on.
Speaker Change: Customer metrics.
Speaker Change: That's important because quite frankly, the company understands that that's how we differentiate in the marketplace. So I am pleased to see with how that's going.
Speaker Change: I think when you get into an environment, where you're back to opening maybe five or six and now it's more about stabilizing and maturing the 'twenty one that we've opened and frankly they are the ones that we've opened in the last two or three years are you know those were ones Theres offered.
Speaker Change: The opportunities at all of those so I think we're making great progress.
Speaker Change: Great and then just one quick follow up if Capex does moderate I think you said 700 million. This year I guess, Matt how should we think about you guys deploying that free cash as a terminal openings slow.
Speaker Change: Yeah.
Speaker Change: Well I mean, we've we've proven that.
Speaker Change: Return.
Speaker Change: Investing capital back in the business has been the right use of that so far if you look at the openings that Fritz talked about we've really been able to pull forward a lot of our our.
Speaker Change: Real estate investment pipeline.
Speaker Change: 'twenty one terminals is no easy no easy task for the group so.
Speaker Change: As we look out I mean, we'll we'll make that call as we get there we still got some investments to be made and footprint in this year is that.
Speaker Change: Bigger tractor by than yours in the past.
Speaker Change: Figure out the right use for that as we go in and just on that comment to Daniel.
Speaker Change: We're in our revolving credit facilities as we stand right now and when we look at our.
Speaker Change: But our projections in terms of Capex and obviously this is subject to timing, but on the interest line, we estimate that to be around a dollar or so EPS impact when we look at the full year. So we're in our credit facility is a little bit more than we used to and as we continue to generate operating cash flow will figure out the right way to deploy that back after we get through some of these bigger years of Capex.
Speaker Change: Great I appreciate all the color best of luck.
Ken: The next question is from Ken <unk> with Bank of America. Please go ahead.
Speaker Change: Hey, great good morning.
Speaker Change: Can you just give a couple of updates on an on time performance our claims ratio through the quarter and then there was.
Speaker Change: Ah spiking and other revenue went up to 27 million up from about 19 to 20 for the last few quarters.
Speaker Change: Maybe your thoughts on what that is from.
Chris Wetherbee: Yeah in terms of I'll, let Chris talk about on time, and how we're looking at that with the new facilities and everything but in terms of the claims ratio. It was <unk> five 9% for the quarter and 0.58% for.
Speaker Change: For the full year.
Speaker Change: Net.
Speaker Change: Revenue line, Ken I mean, that's.
Speaker Change: A bunch of stuff in it that's our asset light business GAAP adjustments. So there's a number of things that are that are in that line.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: I'm, sorry did you say freights wanted to add on or yeah.
Speaker Change: Got it.
Speaker Change: On the on time, a sort of a focus I mean, we measure at a number of different ways from pick up completion to raw service for our customers and we're real pleased with the trends that are there you know I would say that everything that we see are you know we're very comparable to all of our you know the best in class peers.
Speaker Change: Ours around you know on time service of your code and all those sorts of things, we're 98% and above as well.
Speaker Change: Okay, and then just you mentioned in the opening comments rail and truck PT as a percent of line haul at 13% I guess, that's down from about 15% a year ago or 15 four.
Speaker Change: Maybe down from 14% last quarter any thoughts on long term targets do you trend that toward the mid single digits and your thoughts on how we should think about that going forward.
Speaker Change: So we really haven't changed our philosophy around that or a singular objective is to get the ore in this business into the seventies and whatever that takes.
Speaker Change: P T as an important part of our portfolio. So, let's say, we view that as the lowest lowest costs sort of in some cases, the lowest cost line haul option. So we will use it when it makes sense. Most importantly, the customer has to meet we have to meet all the customers' expectations are.
Speaker Change: We do that then we look for a low cost option well not.
Speaker Change: Conceding anything for the customer so I don't have a target there other than to say that we've got to continue to drive the operating costs of the business and the growth of this business such that we can get the or the end of the seventies.
Speaker Change: Pardon me if I could just throw in one last one just you mentioned getting maybe better than your target debt Oh, our target maybe just throw in maybe some thoughts on what gets you. There is it just economic or is there anything else in the next few months quarters that we should look for to get you back to that above Hunter and Hunter 50 target.
Speaker Change: You know I think we've got the potential we've got a highly successful team that.
Speaker Change: We execute I don't think there is a limit on what we can do I think where.
Speaker Change: Just trying to take a balanced view of this in an environment that maybe is a little bit more favorable maybe we accelerate but I wouldn't underestimate our team either I'm just when we give you those sort of full year guys. We're trying to balance that with all the possible outcomes.
Speaker Change: This national footprint is a really big deal I, just underscore that I'm not sure that we fully comprehend the what the potential of it is we think it's we're pretty excited about it though and I think that that's one that we can.
Speaker Change: Keep that execution going we have the opportunity to outperform.
Speaker Change: I appreciate the time thanks, guys.
Speaker Change: The next question is from Ravi Shanker with Morgan Stanley. Please go ahead.
Speaker Change: Great. Thanks, just a couple here just given the volatility and tonnage obviously some of that is macro related but also can you talk about a L. E D L spillover.
Speaker Change: Are you seeing some of that potentially go back already or what are your customers, telling you as you head into an up cycle and potentially tighter LTM market, maybe as a follow up Oh I think it's just a question on the other revenues did you say what the ongoing run rate there it might be thank you.
Speaker Change: Yeah. So on the first part there I'm sorry, I was just going to point to the tonnage comments, we made earlier three quarters of it has come from.
Speaker Change: Markets that we were we opened last year. So I don't think it has anything to do with truckload coming back that's got everything to do with Psi executing and customers being pleased with what they've gotten from us to the extent that there is spillover volume that maybe coming back into the <unk> business I think it's on the margin.
Speaker Change:
Speaker Change: No I don't think it's really been a catalyst one way or the other for us so.
Speaker Change: Yeah, those comments I think the over time the other revenue just to add to that I mean, those or what that sort of gap to adjustment or that revenue line. Other revenue line includes a whole range of things from a deferred revenue that happens at the end of the quarter the timing of receipt of deliveries in <unk>.
Speaker Change: <unk> things like our bad debt expense all sorts of things. So the run rate is a multi year sort of view of that and I would think about it in terms of you know kind of a percentage of revenue I don't know that there's a.
Speaker Change: Metric the calendar drives as much as anything else.
Speaker Change: Great. Thank you.
Eric Morgan: The next question is from Eric Morgan with Barclays. Please go ahead.
Eric Morgan: Hey, good morning, Thanks for taking my question I wanted to follow up on the volume discussion you know you called out shipments up to six and a half tonnage up 13, and a half I believe for January.
Speaker Change: You had called out some weather last year, and then again this year as well. So just wondering if you could provide any more context on that comp.
Eric Morgan: If we see normal seasonality in it.
Eric Morgan: In March maybe is there any way to think about what that implies for <unk> for the full quarter.
Yeah listen regrettably the L. T. L business, we can account, we see weather every year I have I I've been in the business for a decade and Theres always something in the numbers. So I don't I think this is the first time that we saw weather across the highway 10 corridor.
Eric Morgan: Which had an impact on us.
Eric Morgan: Tonnage.
Eric Morgan: Phil up 13, 8%. So the nice thing about it is when you've got a national network, you've got weather diversification due I guess, so we benefited from having facilities in markets that didn't have snow. So that was that was good I I don't really have any insight as to what further February whether it'll be I just know that March.
Eric Morgan: We're execute through March.
Eric Morgan: That's the most important month in the quarter for us and always has been and.
That'll be the real indicator of kind of where the market is.
Speaker Change: Appreciate that and maybe just a quick follow up on yields as well.
Speaker Change: Just given what's happening with mix and you know the contract renewals.
Speaker Change: New terminals I know you mentioned focusing on revenue per shipment.
Speaker Change: Do you think you start seeing that kind of tick up from the 1% its been trending at the last few quarters.
Speaker Change: Maybe I mean can you get to mid single digits this year or how should we be kind of calibrating.
Speaker Change: That line yes.
Speaker Change: Yes.
Speaker Change: I mean, I think part of it is there are like I said earlier, some instances certainly where shippers moving away to try a lower cost option right now and we're not going to go chase that but we're taking the rate increases that we need to and hopefully when the environment comes back or the other carriers struggle is that we're going to get it off.
Speaker Change: <unk> to handle that business back at our rates. So we continue to be focused on pricing each book of business and each shippers freight mix as we as we need to if you were to go back and look I mean, our weight per shipment is down pretty yellow. So it's from where it was before yellow went out to where it is now it's still below.
And revenue per Bill ex fuel is up so I think that's our view of where were taking the pricing and how we're having conversations with our customers and like Chris said the National network is a big deal we get the opportunity to price business that we haven't had an opportunity to look at for customers before because we made out of serve those market. So thats a component of it as well but.
Speaker Change: We remain focused on it and.
Speaker Change: Well, we'll see what we get in terms of of freight mix from customers.
Speaker Change: Eric just to add I mean, I think the biggest thing to keep an eye on what size that our focus intense focus is on closing the revenue per bill, but gap with our peers national peers, we have a national network now we think what that does is it eliminates that as a.
Speaker Change: An impediment to that but driving that mix of business and making sure they're paid appropriately for those capital investments are critically important and that's part of the thesis of investing in sorry, I think we are intently focused on that and finding that freight that pays the bills with.
Speaker Change: With a customer that we can create a tremendous amount of value for that's where we win.
Speaker Change: Yeah.
Speaker Change: Great. Thank you.
Speaker Change: The next question is from Bruce Chan with Stifel. Please go ahead.
Bruce Chan: Yes, thanks, operator, and good morning Jets, almost a 10% increase in the workforce last year, you mentioned that you're not anticipating any improvement in the underlying market. So I guess do you feel like you're fully staffed at this point or are there.
Bruce Chan: It made me more driver additions to make given the fleet investment. This year and then just in terms of bringing the wage cost to market have things kind of stabilize there. Thank you.
Bruce Chan: Yeah, we always are matching our labor force with what the demand environment is so yeah, we'll probably have to if we open those five to six facilities were out at a complement of of employees to go along with that.
Bruce Chan: You know to the extent that the business scales through the year, we'll probably continue to add but it won't be at the same level.
Bruce Chan: But it's all part of the equation of making sure that you have the appropriate staffing that balances what the customer needs from sire and at the same time that makes economic sense for US certainly the 1300 than we added last year was all about staffing a you know 21, new facilities and sort of across the network I mean, if you open up.
Bruce Chan: [noise] facility in Montana in all likelihood you're growing volume in a market somewhere else in the company, which is going to require us to add people in those markets as well so.
Bruce Chan: I would attribute the 1300 to the network expansion and the volume growth that came along with that and you know we'll add as we need to I don't think it'll be anywhere near the numbers that you saw in in 'twenty four but we.
Bruce Chan: We have the appropriate staffing for the volume we're dealing with this week I know that and.
Bruce Chan: You know to the extent that we seasonally increase into the second quarter, we probably had a few people there as well.
Speaker Change: Okay, great. Thanks, and then just a quick follow up on the weight per shipment that you mentioned there were still some residual shake out post yellow and last quarter's numbers.
Speaker Change: I guess it looks like in January you're still seeing a nice positive trend is there any reason to think that you know that weight per shipment numbers starts to slow as we move through the quarter.
Speaker Change: Well I mean, we're still below where weight per shipment was pretty young right. So there was certainly more pronounced mix impacts earlier this year when.
Speaker Change: In the peak season of freight we are handling freight for customers that we just hadn't historically seen.
Speaker Change: Customers that we'd worked with but maybe books of business in that in that portfolio that we had not seen before so we've worked through that but it's only been a couple of quarters and we still have to make sure that we've got a really clean and intent eye on that but.
Speaker Change: We're hoping that it's stabilized, but we don't have a crystal ball and I think part of that too is just the industrial customers still not really there. So what we view this as more of our intentional efforts around mix and targeted conversations with customers.
Speaker Change: Inevitably hopefully when the backdrop gets better we'll see a little bit of that as well, but we're really like Kris talked about we're just making sure that we get paid for what we do in each.
Speaker Change: Customers are a bit different in that too.
Speaker Change: Great. Thank you.
Speaker Change: The next question is from Bascom majors with Susquehanna. Please go ahead.
Speaker Change: Matt I know, it's a little early to talk to <unk> margins, but just from a full year shaping to get to your 80 to 100 bps of expansion should we think about that.
Speaker Change: Sort of typical cadence where to Q L. T O margins are the best of the year and the second half show some deterioration from that and you Fritz just high level.
Speaker Change: With the the big slowdown in openings this year I mean.
Speaker Change: Is it a two to three year runway, where we really kind of grow into this opportunistic pull forward investment for Si are or you know.
Speaker Change: Could we see you know as the cycle turns the the pace of openings start to turn with the cycle. Thank you.
Speaker Change: I'll start first passed them on the <unk>.
Speaker Change: Sequential comments I mean look at.
Speaker Change: It says that if for us to get to the 80 to 100, we've got to improve off of this Q1. So.
Speaker Change: Certainly I mean Q2 generally is the best operating environment operating ratio a quarter of the year. We've got our wage increase that we typically do in July that that's usually part of why.
Speaker Change: While the Q3 O are typically goes backwards, a little bit, but yeah, I mean Q2 typically the <unk>.
Speaker Change: Best freight quarter and.
Speaker Change: Our best operating quarter, but for us to achieve our targets. This year, we've got to improve off of what we're projecting for from a Q1 basis, yeah, right and I think it's important to think about the catalyst for US. This year is building maturity of the 'twenty. One we just opened up.
Speaker Change: I think that it certainly are having the opportunity to find those facilities and put them into our real estate pipeline as well as others.
Speaker Change: It wasn't the the terminal openings weren't just facilities that we got out of the bankruptcy right. These are facilities that we had identified as part of our normal real estate pipeline and we know that although we are very proud of the 214 facility network, there's probably growth still from there those probably gross around expanding.
Speaker Change: Facilities that we currently are in.
Speaker Change: As the business scales, but I I think the potential and the business has a word extraordinary time for side to be able to have that national network, a focused and engaged workforce that is focused intently focused on taking care of the customer is there a multiyear runway here, absolutely and I think that you know we get a little back helping the background I think.
Speaker Change: It goes even faster, but I think that there is right now focusing on the things that we can control I think theres a lot of growth. Even this year you know what I think.
Speaker Change: To go from a Q1, which is could potentially be a bit of an investment quarter from an O. Our perspective to sort of that full year improvement means that we were expecting improvements from here during the year, So and that's really tied to.
Speaker Change: Maturity around the facilities, we've opened so I I think theres a lot of opt.
Speaker Change: Optimism for us at least that's how we think about it.
Speaker Change: Thank you.
Speaker Change: The next question is from Ari Rosa with Citigroup. Please go ahead.
Ari Rosa: Hi, good morning, So I wanted to ask about the target to get to the a sub 80 or and just kind of how you see the timeline for that developing out how much of that is dependent on an improving macro environment and maybe if you could.
Speaker Change: I know people have asked us in the past, but just quantify the extent to which those new terminal openings have kind of been a drag on our war that that would be really helpful. For us. Thank you.
Yeah, I mean, that's just focus will break that apart. The first part about it I mean, I think that you know.
Speaker Change: I think I'd point to our experience over time around you know when there is a favorable backdrop backdrop, you've seen si outperform on the or improvement overtime I think what is a little bit different about where we are as a company right. Now is that it's a little bit unusual in our 100 year history to open 21 facilities in <unk>.
Speaker Change: 112 month period of time, but that regrettably requires investment right and when you have a long term focus you're going to make the investment and then as you mature out of those are in those facilities you would expect to see or improve you have those facilities for a purpose and certainly in a stronger environment.
Speaker Change: Probably approach that 200 or point improvement, a year or better and a more challenged market where you're at the lower end of the range. That's just kind of life in a big city and the long term.
Speaker Change: With a long term focus.
Speaker Change: I would tell you that I think that the opportunity for our team to compete with a very high level service and you look at what the opportunity is versus the market around getting the appropriate compensation for the services that people are getting in the right mix of business I think there to close the gap to market around pricing.
Speaker Change: I mean, I think it's a huge opportunity. So if we get more of that coming from mix and price I think we accelerate this pace at which we can improve the or in the business.
Speaker Change: We're excited about the prospects on the other the other part of your question, Matt Scott that yeah. If we look at the all the openings for the year.
Speaker Change: Seasonally Q3 to Q4, the or deteriorates those seasonally.
Speaker Change: In total the 'twenty, one operated right around breakeven for the quarter and that.
Speaker Change: That's a drag on the company, but like <unk> said these are investments that we're not making for the short term one of the things that really excites us about what the potential of the businesses. If we look at the ones that we opened in Q2. So we did six in Q2 those got better into Q3, and then they didn't go back as far as the base business.
Speaker Change: Did in Q4 and that really goes to show us what the potential is as they grow and take market share, but also as the cost structure matures, there eight months and theyre not at a mature cost structure, yet so that's really where we get excited about the potential in the business not only to do a great job for our customers in new and existing markets, but also to really make.
Speaker Change: Sure that we're operating efficiently as each month goes on we take market share, but we also operate more and more efficiently in our in our field operations business as well so.
Speaker Change: That's something that we get excited about but in the near term, they're a drag as we would expect them to be.
Got it that's really helpful Fritz and Matt maybe if I could ask just a follow up it seems like there are some better.
Speaker Change: Volume trends here and better weight per shipment trends in December and January I hear your point about a lot of that is it's kind of company specific initiatives and focus on on revenue mix, but maybe you could break out how much of that is kind of those idiosyncratic efforts better science specific versus maybe a little bit of a turn in terms of market improve.
Speaker Change: Men versus maybe a comp assumption of what the comps look like.
Speaker Change: Well I think I'd point to a couple of data points that will kind of pull together we've highlighted right. So we've said that three quarters of the growth in the business has come from terminals that were.
Speaker Change: <unk> opened last year right. So I think we would conclude then that the.
Speaker Change: The weight per shipment improvement the freight characteristics and the markets that we've gone into it seems like that was a good idea to make that investment.
Speaker Change: So that his could been a.
Speaker Change: A contributor to that as well as the overall performance of the company I mean, we we have said from the beginning of when we took on a lot of the disrupted freight we said we've got to continue to work at <unk>.
Speaker Change: Pricing and mix of business and we've done that and you're starting to see the result of that so I think that the combination yet.
Speaker Change: I wish I could tell you that there were some macro indicator out there I prefer to focus on maybe it's things that we can control and the things that we can control are the openings in good markets identifying the freight that makes sense for us thus wafer shipment improvement and also focusing on making sure. We find those customers that value that I think that shows shut up.
Speaker Change: And the operating results throughout all this keeping the costs in line. Despite all of these openings.
Speaker Change: I mean, we got it okay, because it's glad that sorry.
Speaker Change: We've mentioned it in the.
Speaker Change: Script, part, but essentially flat cost per shipment year over here, 2%, but if you think about all the investments made the costs associated with new terminal openings everything that went on this year. We were really pleased with that for the cost per shipment to be essentially flat year over year. So I think to <unk> point that goes to show what the value is of these.
Speaker Change: Earnings and where we feel like the potential is.
Speaker Change: Okay, great. Thank you for the time.
The next question is from Stefan anymore with Jefferies. Please go ahead.
Speaker Change: Alright. Thank you. This is Joe <unk> on for Stephanie Mark Congrats on the good results I wanted to speak a little bit about the competitive environment and what you guys are seeing and particularly how you guys are viewing the potential.
Speaker Change: Change at Fedex freight, obviously hiring a lot of their.
Speaker Change: Our internal sales force to maybe be a little bit more aggressive on on growing their market share. So I'm curious how you guys kind of think about the puts and takes of that.
Speaker Change: Yeah, I mean, it just listen to the other day, what happens at a competitor.
Speaker Change: We've got to pay attention to that but fundamentally.
Speaker Change: We got to take care of our customers and identify customers that need consistent.
Speaker Change: And just rough to sort of service from their provider I mean, you think about the challenging macro environment.
Speaker Change: That that some of our customers are having to deal with they probably don't want to deal with a lot of change from an LPL for Ryder. So.
Speaker Change: The opportunity for side, there is provide sort of a high level of service limited disruption to the customer in a tough environment. So that's kind of how we think about it and we think about providing a.
Speaker Change: Great place to work great crew opportunities keep a very high level of engagement of our workforce that's.
Speaker Change: That's the team that wants to be part of a growing company and you know to the extent that others are trying to build their own case, I mean I think that's.
Speaker Change: We'll let them worry about that we're worried about our sort of business.
Speaker Change: Great. Thanks, so much and then I mean, maybe you guys are clearly winning a lot of business could you maybe give us an insight into sort of the.
Speaker Change: Our sales force morning meeting, what Theyre focused on attacking what theyre going after if theyre looking at SMB growth.
Speaker Change: Curious what your sales force is really looking out over the next year.
Speaker Change: Yeah. So our Salesforce, we spent a lot of time coming data around what the sales opportunities are in markets that we're currently in or markets that are developing and we arm our sales force with data that tells them where the opportunities might be.
Speaker Change: So you got to give them that sort of the topline view of hey, here's what the potential is here.
Speaker Change: Here's the data here's who we need to call on these are the industries. These are the places that we can provide very competitive service both from a you know.
Speaker Change: Service time in transit time, which are all important to customers your arm them with that.
Speaker Change: And then you give them a product that is very very high level of service low claims on time, we do what we say we're gonna do you do that over and over again that gives something for our salespeople to sell so it starts with the data that they're armed with the go attack the markets in which they operate or where they where we've positioned them to compete in and you provide a great service behind it.
Speaker Change: And I think if you look at the results that we've had over the last few months I think that that sort of works and that's kind of our focus from here.
Speaker Change: And I think that's been a winning proposition and we're excited about what the potential of those.
Perfect. Thanks, so much.
Speaker Change: The next question is from Christopher Combe with benchmark. Please go ahead.
Christopher Combe: Yeah, Hi, good morning, guys. Thanks for the question, maybe just can you talk a little bit about <unk>.
Christopher Combe: Got it almost 10% of the work force I mean, how do you keep that service and quality and culture.
Christopher Combe: In addition, and then what's the timeframe that that those new employees get to kind of full productivity, but that.
Christopher Combe: Matches, what your what your existing employees.
Speaker Change: Yeah, that's a great question, Chris and it's something that we're very very focused on.
Speaker Change: Making sure that you have the appropriate training in place on boarding I mean, when we were in the height of opening the 21 facilities I mean, we had a very.
Speaker Change: Disciplined timeline around making sure that we had the training and hiring in place hopefully positioning a.
Speaker Change: Sigh of leader from another facility into a new facility to help bring that culture to the facility.
Speaker Change: Training that but still as you point out it takes a number of months to kind of get to the peak efficiency of where you'd like to be and so it depends sometimes it happens pretty quickly and sometimes maybe it takes a year to get that sort of cultural sort of.
Speaker Change: At a par where we are in the rest of the company, but yeah. You you don't you treat every individual every location differently and you keep keep that focus intently around hey, this is a great place to work the only place. The reason why this is a great place to work is we take great care of the customer in that theme kind of goes over and.
Speaker Change: Over again, and we do that and we find that will get people in.
Speaker Change: Sure the order around operating in kind of the way we'd like to.
Speaker Change: I mean does that benefit deal are a bit more than that and Oh, absolutely you see it in all kinds of places right.
Speaker Change: The more you get a an experienced workforce in place you get better service metrics.
Speaker Change: Productivity goes up.
Speaker Change: Safety issues come down or mitigate it right. So you have fully trained employees understanding how we do things you see claims our injury injury rates decline, which is great to see.
Speaker Change: When you see that you also often see improvement on the claims line in terms of damaged freight those things those decline overtime all of those things come together.
And you see sort of peak efficiency and at the same time you have a sales force is out calling on customers with that data and that's a winning proposition. So it kind of turns into a kind of a virtuous cycle. If you will there, but it usually takes some time.
Speaker Change: Great. Thank you.
Speaker Change: The next question is from Tyler Brown with Raymond James. Please go ahead.
Tyler Brown: Hey, good morning, guys.
Tyler Brown: Okay, Hey, I know the 10-K is gonna be out soon but you guys have an update on what your door ownership position looks like today I assume that stepped up quite a bit and then longer term do you know kind of think about where you want that to be the bottom.
Tyler Brown: Part of that journey into the seventies.
Tyler Brown:
Tyler Brown: So to your question Tyler door door growth.
Tyler Brown: We finished the year right around in total just north of 9900 doors, we own about 70 ish percent of those doors, so 60% of the terminals, 70% of the doors. So we do our best to own our strategic larger assets to the extent that we can I mean look we.
Tyler Brown: In certain instances to be in the market you may have to lease for a period. So it's important to the extent that we can but we don't view that as a we can't get into the seventies, unless we own more of them. We we tried to but there's also a cost of not being in the market at certain points to I think Chile or two on the lease piece I think that there is.
Tyler Brown: Plenty of data out there around some of the lease opportunities are out in the market or have been.
Tyler Brown: Turning to lease them, because it's a very very competitive sort of lease structure.
Tyler Brown: As Matt pointed out it's candidly more important to be in the market. If your cost structure is what it is you got to make sure you get compensated for it so.
Tyler Brown: That becomes part of the business case around whether or not it makes sense to lease a property.
Speaker Change: Yeah, no that's extremely helpful. Thank you.
Tyler Brown: Yeah, Matt.
Speaker Change: Alright, I think you said five to six new terminals this year.
Speaker Change: Sounds like those are more saturation terminals, let's call them what about the reward.
Speaker Change: Wait still look pretty good in 'twenty, five and basically well door count exceed terminal count again.
Speaker Change: Well once you once you are considered.
Speaker Change: Consider both reloads as well as some sort of a terminal expansions that we've had I mean, we're adding Harrisburg and Dallas I mean, the good news problem. We have is theres been a lot of growth those are big breaks up operations for so you need to expand that so I would expect to see I don't have the exact door.
Speaker Change: <unk> increased projected but we will see between reloads and expansions, we will see additional door count adds this year certainly the five to six that will open our yeah, Hey, listen every market. We're in is important but there is no Harrisburg Theres no Dallas, no Memphis and there they tend to be smaller as the ones that are.
Speaker Change: We will open.
Okay, perfect and my last one here if we can come back to your revenue per Boe comment.
Speaker Change: Can you guys just update us on where you sit on all of us as a formal journey.
Speaker Change: Maybe we can use a baseball analogy principal try to stay away from football College now thank.
Speaker Change: Thank you.
Speaker Change: The Cup football analogies arent too bad, though but anyway go.
Speaker Change: Go ahead, Matt.
Speaker Change: Yeah.
Speaker Change: Yeah I mean.
Speaker Change: We still feel like we've got work to do and we feel pretty early yet for us the way that we look at it we compare ourselves to the public carriers and available metrics that are out there and we look across the board were cheaper than everybody else and at our footprint expansion and our ability to do a great job for customers.
Speaker Change: In every market as an opportunity for us to do a great job for them take share, but also charge appropriately for it and we view that in the base rates and accessorial isn't one of the things that we're really excited about is we have more data than we've ever had available to us for our teams when we sit in front of a customer to show them exactly what we're doing for them and where.
Speaker Change: We're going for them and how that compares to our assumptions in a number of things that helped drive those discussions so.
Speaker Change: In terms of the baseball analogy I'd say, we're still in the relatively early innings when because of the way. We look at it is we're still cheaper on the total revenue per barrel basis.
Speaker Change: Excellent. Thank you guys.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Fritzls graph for any closing remarks.
Speaker Change: Thank you thanks, everyone that called in for your time and attention.
Speaker Change: Worrying about the size store in stores that story of where we are in our journey looking.
Looking forward to giving you update next quarter. Thank you.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: [music].
Speaker Change: Yes.